Exhibit 99.1
August 12, 2004
Tofutti Press Release
Company Contact: Steve Kass
Chief Financial Officer
(908) 272-2400
(908) 272-9492 (Fax)
TOFUTTI ANNOUNCES SECOND QUARTER RESULTS
Cranford, New Jersey -- August 12, 2004 -- TOFUTTI BRANDS INC. (AMEX
Symbol: TOF) today announced its results for the thirteen and twenty-six week
periods ended June 26, 2004.
Net sales for the thirteen week period ended June 26, 2004 at
approximately $5.1 million increased $69,000 from the sales recorded for the
thirteen weeks ended June 28, 2003. Net sales for the twenty-six week period
ended June 26, 2004 decreased 5% to $9.1 million compared with net sales of $9.6
million for the twenty-six week period ended June 28, 2003. The sales decline in
the first quarter was caused in part by the Company's discontinuance of certain
unprofitable products and product lines starting at the end 2003, and it no
longer has the benefit of their sales. For the thirteen and twenty-six week
periods ended June 26, 2004, the Company reported operating income of $465,000
and $564,000, respectively, as compared with operating income of $448,000 and
$906,000 for the thirteen and twenty-six week periods in 2003. The Company's
operating results in 2004 were negatively impacted as a result of rising raw
material costs, increased costs of manufacturing, new product start-up costs,
including costs incurred at new co-packaging locations, and higher packaging and
freight charges. The Company expects that during the remainder of 2004 its
operating expenses will continue to be affected by these same factors, but
expects that recently completed sales price increases will help mitigate the
effect of these higher operating costs.
The Company recorded net income of $264,000 ($0.04 per share) for the
thirteen weeks ended June 26, 2004 compared to $265,000 ($0.04 per share) for
the thirteen weeks ended June 28,
2003. Net income for the twenty-six weeks ended June 26, 2004 was $336,000
($0.05 per share) compared to $534,000 ($0.08 per share) for the twenty-six
weeks ended June 28, 2003.
Although the Company has utilized over $4.5 million since September 2000
in connection with its stock repurchase program and in the retirement of
dilutive options, it had working capital of $3.5 million and cash and cash
equivalents of over $1.7 million at June 26, 2004.
Mr. David Mintz, Chairman and Chief Executive Officer of the Company
stated, "We are pleased with the increased level of sales in the second quarter.
Our major customers increased their order flow in the second quarter, and we
expect that to continue for the balance of this year. With our recently
completed price increases, we also look forward to an improvement in our gross
profit margins during the third and fourth quarters. We continue to see market
acceptance of both our current and new products and believe that the upward
trend of our sales will continue during the remainder of the year.
TOFUTTI BRANDS INC. is principally involved in the development,
production and marketing of TOFUTTI brand soy-based, dairy-free frozen desserts
and soy-based, dairy-free food products which contain no butterfat or
cholesterol. TOFUTTI products are sold in grocery stores, supermarkets, health
and convenience stores throughout the United States and in seventeen other
countries.
Some of the statements in this press release concerning the Company's
future prospects are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. Actual results may vary significantly based upon
a number of factors including, but not limited to business conditions both
domestic and international, competition, changes in product mix or distribution
channels, resource constraints encountered in promoting and developing new
products and other risk factors detailed in the Company's filings with the
Securities and Exchange Commission, including its annual report on Form 10-KSB.
TOFUTTI BRANDS INC.
Condensed Statements of Operations
(in thousands, except per share figures)
Thirteen Thirteen Twenty-six Twenty-six
weeks ended weeks ended weeks ended weeks ended
6/26/04 6/28/03 6/28/03 6/28/03
------- ------- ------- -------
Net sales........................ $5,149 $5,080 $9,141 $9,594
Cost of sales.................... 3,444 3,424 6,283 6,349
----- ----- ----- -----
Gross profit..................... 1,705 1,656 2,858 3,245
Operating expenses............... 1,240 1,208 2,294 2,339
----- ----- ----- -----
Operating income................. 465 448 564 906
Interest income.................. 3 3 4 5
--- ---- --- ---
Income before income tax......... 468 451 568 911
Income taxes..................... 204 186 232 377
--- ---- --- ---
Net income ...................... $264 $265 $336 $534
==== ==== ==== ====
Net income per share:
Basic.................... $0.05 $0.05 $0.06 $0.09
===== ===== ===== =====
Diluted.................. $0.04 $0.04 $0.05 $0.08
===== ===== ===== =====
Weighted average number of
shares outstanding:
Basic.................... 5,702 5,719 5,727 5,775
===== ===== ===== =====
Diluted.................. 6,296 6,696 6,313 6,745
===== ===== ===== =====
TOFUTTI BRANDS INC.
Condensed Balance Sheets
(in thousands)
June 26, December 27,
2004 2003
(Unaudited) (Audited)
----------- ---------
Assets
Current assets:
Cash and equivalents $1,709 $2,557
Accounts receivable (net of allowance
for doubtful accounts of $184 and $149,
respectively) 1,679 1,508
Inventories 542 774
Prepaid expenses 7 --
Prepaid income taxes 182 55
Deferred income taxes 220 220
---- ---
Total current assets 4,339 5,114
Fixed assets(net of accumulated amortization
of $7 and $5, respectively 41 43
Other assets 16 16
-- --
Total assets 4,396 $5,173
===== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $740 $471
Accrued officers' compensation - 500
Income taxes payable 255 105
--- ---
Total current liabilities 995 1,076
--- -----
Commitments and contingency -- --
Stockholders' equity:
Preferred stock - par value $.01 per share;
authorized 100,000 shares, none issued -- --
Common stock- par value $.01 per share;
authorized 15,000,000 shares, issued and
outstanding 5,636,867 at June 26, 2004
and 5,709,867 shares at December 27, 2003 56 57
Additional paid-in capital 162 1,193
Accumulated earnings 3,183 2,847
----- -----
Total stockholders' equity 3,401 4,097
===== =====
Total liabilities and stockholders' equity $4,396 $5,173
====== ======